CFTC Allows Derivatives Firms to Use Customer Funds for Investing in Tokenized Assets

The U.S. Commodity Futures Trading Commission (CFTC) has expanded the legal framework for tokenized assets, allowing organizations to invest customer funds in tokenized versions of eligible assets. The tokenized versions must ensure legal rights and economic benefits equivalent to traditional assets while meeting custody requirements. The CFTC also permits the use of blockchain and distributed ledger technology as the official record-keeping system. Businesses may not need to maintain an off-chain copy if using a private blockchain. CFTC Chairman Michael Selig stated that this change aims to clarify regulations for the crypto industry. Previously, the U.S. Senate did not pass the CLARITY Act, making the prospect of completing a legal framework for the crypto market by 2026 seem distant. While Congress is at an impasse, the CFTC and SEC are leveraging their existing authority to expedite policy. On September 17, the CFTC submitted a plan to develop regulations for crypto trading and markets to the Office of Information and Regulatory Affairs (OIRA) at the White House. On the same day, the CFTC relaxed regulations for software developers connecting users to the derivatives market. The SEC has also announced the Innovation Exemption, allowing the trading of tokenized U.S. stocks through automated market makers (AMMs) on public blockchains.

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